Yum China (YUMC) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $2.68 billion, operating profit of $266 million, and diluted EPS of $0.55, with system sales up 4% year-over-year and operating margin at 9.9%.

• Core operating profit grew 12% to $275 million; net income attributable to shareholders was $212 million, up 8% year-over-year.

• Opened 401 net new stores in Q2, with total store count reaching 15,423, contributing 8% to sales growth.

• Double-digit growth in transactions and delivery sales, with digital orders accounting for 90% of sales and loyalty program members exceeding 495 million.

• Nearly $1 billion returned to shareholders year-to-date through buybacks and dividends.

Financial highlights

• Q2 2024 revenue was $2.68 billion (+1% year-over-year); operating profit $266 million (+4%); diluted EPS $0.55 (+17%).

• Restaurant margin was 15.5% in Q2, stable year-over-year after adjusting for comparability items.

• Adjusted EBITDA for Q2 was $399 million; net income for Q2 was $212 million.

• G&A expenses decreased 11% year-over-year, now 5% of revenue.

• Net cash at end of Q2: $3.1 billion; cash and cash equivalents at $1.04 billion.

Outlook and guidance

• 2024 targets unchanged: plan to open 1,500–1,700 net new stores, capital expenditures of $700–$850 million, and return a record $1.5 billion to shareholders.

• 2024–2026 growth targets: 20,000 stores by 2026, with high single to double-digit CAGR for system sales, operating profit, and EPS.

• Sufficient liquidity and cash flow expected to fund operations and capital needs for the next 12 months.

• Cost savings from Project Fresh Eye and Project Red Eye expected to continue in H2.